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Starknet, Rollups & L2

What is Starknet?
Starknet is a zero-knowledge proof roll-up chain that posts proofs of state changes in L2 that an L1 contract verifies is indeed a valid state change as per the business logic in L2.
Who created Starknet & where can I learn more?
Starkware, the team behind StarkEx, are close strategic and technology partners of the project.
You can learn more about the following topics:
  • StarkWare
  • Starknet
  • Rollups
  • ZK-Rollups
  • STARKs, SNARKs and Validity Proofs
  • Fractal Scaling - App-chains in Rollups

Onboarding & Authentication

How does Starknet key derivation differ from StarkEx?
Effectively there is no difference, one and only one starknet key pair can be generated by signing an Ethereum onboarding transaction.
Why do I need to generate a JWT?
The JWT security standard is well adopted as a secure authentication mechanism that preserves the security of the account without sending sensitive keys unencrypted.
Since you can only generate this with both an Ethereum key-pair and the corresponding Starknet key-pair, this ensures that users interacting with Paradex are the ultimate owners of that account. See more at https://docs.api.testnet.paradex.trade/#get-jwt.
Why are your trade and order IDs such large numbers?
We recommend, as specified in API documentation, to treat them as sortable strings rather than numeric/integer types.

Deposits & Withdrawals

What do I need to do to deposit funds into Paradex to start trading?
Effectively, the same thing that a user would have to do on any other L2 hybrid dex:
1) Onboard via Ethereum and create your Starknet account
2) Bridge funds from Ethereum into your Starknet account
3) Deposit funds from your starknet account into the Paradex smart contract
Paradex UI is currently the only way to bridge and deposit funds into Paradex smart contracts. However we will release RPC endpoint specifications such that you can initiate it yourself.
What do I need to do to withdraw funds from Paradex?
Much like deposit flow but in reverse:
1) Withdraw from Paradex smart contract your available free collateral to your Starknet account 2) Bridge your funds from your Starknet account back to your Ethereum address
Am I able to transfer funds from Public Starknet Paradex's Private Starknet?
No, we only support deposit/withdrawal functions from L1 to ensure security.
Can I transfer funds to another account on L2?
Currently, no. Account transfer is not possible as a native L2 functionality.
However, users can withdraw funds back to L1 and then transfer to another L1 address on Ethereum, from where the account may deposit into the associated L2 address.

Accounts

Is it possible for me to self-trade by placing crossing orders in the orderbook?
No, self-trading is not possible with the same account.
Are sub-accounts possible?
Currently, no.

Trading & Markets

What are the margin types supported?
Currently, just cross-margin mode is enabled.
What are the collateral currencies supported to margin positions?
Currently, just USDC.

Perpetual Funding Mechanism

What is the difference between Paradex funding mechanism vs. other hybrid Dexs?
There is no difference in the mechanism by which funding is accrued, see the detailed fomulae here. The only difference is the settlement methodology which prevents funding manipulation and latency spikes at funding settlement periods. Whereas other exchanges operate an hourly, 8-hourly or other periodic settlement period, Paradex has a continuous accrual mechanism. In order to reduce on-chain transaction spikes, funding is continuously accrued on an account with a perpetual futures position and the entire unrealized funding P&L of that account's position is settled every time the position is adjusted on-chain.
Scenario 1
Position ETH-USD-PERP accrues funding of amount X over period Y.
User reduces ETH-USD-PERP by 10% using market/limit order.
Total unrealized funding is realized for that account upon settlement of fill.
Position continues accruing funding thereafter.
Scenario 2
Position ETH-USD-PERP accrues funding of amount X over period Y.
User opens BTC-USD-PERP position using market/limit order.
No funding realized for either position, however both instruments will be accruing funding pnl assuming non-zero funding rate.

Liquidations

How do you prevent platform insolvency?
Paradex utilizes a layered approach, ensuring the platform cannot become insolvent.
  1. 1.
    Insurance fund - see balance here
  2. 2.
    External Liquidator Program - coming soon
  3. 3.
    Socialized Losses - last level of backstop

Rate Limits

What are your rate limits?
See Rate Limits documentation page for full details.
What algorithm do you use for rate limits?
We use the Token Bucket algorithm and you can understand how this works in practice via several online resources, we liked this.
Are rate limits shared for any endpoints?
Yes, we would recommend reviewing the Rate Limits documentation page for full details.
At a high level, the key takeaway is:
  • All Public API endpoints have a shared limit of 10/sec
    • Exceptions are Onboarding & Deposit which together have a lower shared limit of 1/sec
  • All Private API endpoints have a shared limit of 10/sec
    • Exceptions are Create & Cancel Order which together have a higher shared limit of 100/sec
Last modified 1mo ago